Jack Lowe, president of the Dallas Independent School District board of trustees, is in New Braunfels awaiting the birth of his seventh grandchild. But shortly before he left town yesterday, he met with DISD superintendent Michael Hinojosa, who told Lowe the bad news reported below: The district is $64 million short for its 2007-'08 budget.

"The money's gone, and there's nothing we can do about it," he says. As of yesterday, the DISD instituted a district-wide hiring freeze.

He offers the same explanation as Hinojosa for the surprise shortfall: "We made lots of changes last year, adding more teachers, more classes, bonuses, teaching coaches, arts teachers." Only, the district's budget and finance officials never took into account the extra cost of additional staff, while at the same time approving every single expenditure and request. "They said, 'Yeah, we can do that,'" Lowe says, "and they were wrong."

On top of that, during the course of the year, the budget and finance folks were so consumed with the [long-delayed] '06-'07 budget, they didn't see this coming. And we've got 250 unauthorized hirings. Principals would call and say, 'We need another teacher,' and we hired another teacher."

He also says this could be blamed on a few "unexpected things," including a dispute with the state concerning DISD's contribution to a teacher retirement fund. DISD said it owed nothing; the state said it owed $5.5 million, which the district went ahead and paid in full. "Houston has the same dispute and did not pay them," Lowe says.

By Lowe's own admission, the ramifications of this discovery are enormous; he says he expects the district to make "some changes, I don't know what kind," and that the hiring freeze will be but a small part of it.

Lowe also expects that there may be a similar problem with this year's budget. "We're going to have to look into that immediately," he says.

"There's not a hell of a lot we can do," he says. "Payroll is 85 percent of the cost, and folks have signed contracts for the school year. But people will leave, and we won't rehire. And, look, I'm worried about this, and I intend to deal with this as soon as I get back. Because if anyone should have smoked this out, it should have been me. I'm the member of the board with the most business experience, I am used to dealing with big numbers, I should have seen this coming, and I didn't do it. Shame on me." --Robert Wilonsky